The US prepared to hit China with new tariffs even as President Donald Trump said he'll meet his Chinese counterpart, Xi Jinping, at next month's G-20 summit, an encounter that could prove pivotal in a deepening clash over trade.

The US Trade Representative's office Monday released a list of about $300 billion worth of Chinese goods including children's clothing, toys, mobile phones and laptops that Trump has threatened to hit with a 25% tariff.

If Trump proceeds with the tariffs, it would see almost all imports from China covered by punitive import duties. It also would turn the president's trade wars into a tangible reality for many Americans as he seeks re-election.

At the same time, Trump is sounding optimistic about the chances of a deal. "When the time is right we will make a deal with China. My respect and friendship with President Xi is unlimited but, as I have told him many times before, this must be a great deal for the United States or it just doesn't make any sense," he tweeted on Tuesday.

Under a process outlined by US officials, the new tariffs would not take effect until late June at the earliest. But that could come just as Trump meets with Xi on the sidelines of a Group of 20 leaders meeting June 28-29 in Osaka, Japan, raising the stakes in an already escalating trade war.

Earlier on Monday Trump warned Beijing not to go too far in responding to US trade actions after China rolled out its retaliation to his move to hike import duties on a separate $200 billion tranche of imports from China last week.

"There can be some retaliation, but it can't be very substantial," Trump told reporters Monday at the White House during a meeting with Hungarian Prime Minister Viktor Orban.

US equity futures rose alongside European stocks on Tuesday while shares in Asia dropped. Shares in Shanghai posted a modest decline, while Hong Kong equities slumped as the market re-opened after a holiday.